Академический Документы
Профессиональный Документы
Культура Документы
v.
COMPLAINT FOR
JOSHUA KAUFMAN; PRADEEP BUBNA; INJUNCTIVE RELIEF AND
LOKENDRA JAIN; MARTIN FLYER JEWELRY MONEY DAMAGES
LLC; KGK JEWELRY LLC; KGK JEWELRY MFG.
LTD.; ALAN BLOOM; PRASAD SAHOO;
ACCURATE GRADING QUALITY ASSURANCE,
INC.; STEVE YEKO; and TED KRAPF, JURY TRIAL DEMANDED
Defendants.
and for their Complaint against Joshua Kaufman, Pradeep Bubna, Lokendra Jain, Martin Flyer
Jewelry LLC (“Martin Flyer LLC”) (together, the “Martin Flyer Defendants”), KGK Jewelry
LLC, KGK Jewelry Mfg. Ltd., Alan Bloom, Prasad Sahoo (together, the “KGK Defendants”),
Accurate Grading Quality Assurance, Inc. (“AGQA”), Steve Yeko, and Ted Krapf (together, the
INTRODUCTION
1. This action arises from blatant -- and quite possibly criminal -- acts of theft.
accounting and business automation software (the “ASI Financials Software”) that Martin Flyer
LLC’s predecessor, Martin Flyer, Inc., used for over seven years, with great success and little to
none of the business interruptions caused by many competing software products on the market.
proprietary software, Joshua Kaufman concluded that it would be cheaper to simply steal
Plaintiffs’ software than it would be to buy it. So that is what he did.
4. Joshua Kaufman and the other Martin Flyer Defendants have, continue and will
continue to unlawfully use Plaintiffs’ intellectual property as a key element of their jewelry
production and sales business, and garner millions of dollars in profits by doing so.
not only for use in their own business, but they have also invited the AGQA Defendants and
KGK Defendants to loot Plaintiffs’ intellectual property and pick through it to see if there is
anything they can use for their own businesses and financial gain.
6. Both the AGQA Defendants and KGK Defendants have readily accepted the
Martin Flyer Defendants’ unlawful offer, and have likewise misappropriated Plaintiffs’
intellectual property and unlawfully gained substantial profits from doing so.
Defendants from causing irreparable harm to Plaintiffs, as well as millions of dollars in damages
violations of the Digital Millennium Copyright Act, violations of the Computer Fraud and Abuse
Act, misappropriation of Plaintiffs’ trade secrets and other confidential information, unfair
9. Plaintiff Nick Santino is the President of Argentto and its principal software
10. Defendant Joshua Kaufman is an employee and the Chief Executive Officer of
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Martin Flyer LLC, and regularly performs his work in that capacity in New York, New York. On
information and belief, Joshua Kaufman resides in New York, New York.
Flyer LLC, and regularly performs his work in that capacity in New York, New York. On
information and belief, he also has an employee and/or agency relationship with Defendant KGK
Jewelry LLC and/or KGK Jewelry Mfg. Ltd., and regularly performs work in said capacity in
MF LLC, and regularly performs his work in that capacity in New York, New York.
13. Defendant Martin Flyer Jewelry LLC is a domestic corporation with its principal
14. Defendant KGK Jewelry LLC (“KGK Jewelry (NY)”) is a domestic corporation
with its principal place of business in New York, New York. On information and belief, it is
owned in whole or in part, and either directly or through a subsidiary, by the KGK Group, which
15. On information and belief, Defendant KGK Jewelry Mfg. Ltd. (“KGK Jewelry
(China)”) is a Chinese company with its principal place of business in Panyu, Guangzhou, China.
On information and belief, it is owned in whole or in part, and either directly or through a
KGK Jewelry (NY), and regularly performs work in that capacity in New York, New York.
Flyer LLC and regularly performs his work in that capacity in New York, New York. On
information and belief, he also has an employee and/or agency relationship with Defendant KGK
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Jewelry (NY) and/or KGK Jewelry (China), and regularly performs work in said capacity in New
19. On information and belief, Defendant Steve Yeko is the Owner and President of
20. On information and belief, Defendant Ted Krapf is, or was during the period
relevant to this action, an employee and the Chief Technical Officer of AGQA.
21. The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§
1331, 1338(a), and 1367. Plaintiffs allege claims for copyright infringement arising under the
Copyright Act of 1976, 17 U.S.C. §§ 101 et seq., the Computer Fraud and Abuse Act, 18 U.S.C.
§§ 1030 et seq., and for related common law and state law claims of misappropriation of
Plaintiffs’ trade secrets and other confidential information, unfair competition, unjust enrichment,
conversion, breach of contract, and tortious interference with Plaintiffs’ contractual relations.
22. Venue is proper in this District under 28 U.S.C. §§ 1391(b) and 1400(a), as a
substantial part of the events giving rise to this action occurred in this District, and Defendants
FACTUAL BACKGROUND
23. Nick Santino founded Argentto in 2001. Argentto is a software development and
consulting company that develops, customizes and provides computer software solutions to
businesses ranging from computer and other manufacturers to law firms to investment banks.
Argentto offers a full suite of software programs, from accounting enterprise systems, to oil
trading software platforms, securities portfolio management software, legal case management
software, and various interactive web applications. In addition, Argentto provides information
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technology (“IT”) consulting and support services to its clients.
Argentto has developed unique intellectual property unparalleled in its industry, including multi-
company accounting software that permits entities with multiple business units to consolidate
their general ledgers into a single database, investment portfolio management software, and
interactive web-based job posting software that integrates the needs of job candidates, staffing
services, and potential employers. Argentto has applied for and/or obtained copyright
registrations for these and other software packages it has developed for sale to its clients.
expense and programmer time, a unique and proprietary software system that allows, among
other unique and proprietary features, a business to consolidate its accounting across multiple
26. The ASI Financials Software not only provides licensees with great time and cost
savings related to bookkeeping and accounting tasks, its automation of many tasks and
aggregation of myriad data also contributes greatly to operational efficiency, and helps a
company like Martin Flyer LLC increase sales and productivity, thereby driving even more
27. Although it is based on proven Microsoft technologies such as the SQL Server
database software, the user interface, data algorithms, data tables, drivers, and database structure
of the ASI Financials Software consist of numerous original constituent elements. It contains
several hundred thousand lines of software source code, and over 6,000 hours of Argentto
programmer time over an extended period of time were required to write the ASI Financials
Software.
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28. Nick Santino obtained a U.S. Copyright Certificate of Registration for the ASI
29. Argentto maintains the confidentiality of its trade secrets, including its proprietary
30. First, all Argentto employees and contractors are required to sign strict
31. Second, Argentto’s programmers who develop, test, maintain and upgrade its
source and object code are the only individuals at Argentto who have access to that code through
password-protected computers. Argentto provides each programmer with a user name and
password without which the programmer cannot access the system on which the source code
resides.
32. Third, Argentto programmers are prohibited from working on Argentto software
outside the office. At the office, Argentto programmers are permitted access only to their own
33. Fourth, Argentto’s offices, including the servers on which its proprietary software
34. Finally, while Argentto provides its actual and prospective customers and
licensees with access to its software user interfaces to view its form and functionality, and may
offer limited access to underlying data to the extent the customer or licensee requires such access
for daily use, absolutely no one other than Argentto’s own computer programmers has access to
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THE RELATIONSHIP BETWEEN NICK SANTINO AND ARGENTTO
AND THE FLYER FAMILY AND MARTIN FLYER INC.
35. Martin Flyer, Inc. – loosely speaking the predecessor of Martin Flyer Jewelry LLC
– is a decades-old multi-generational family jewelry business that was controlled and run by Gary
36. For over seven years, Martin Flyer, Inc. was a loyal Argentto customer and
37. During that time, the ASI Financials Software ran smoothly, with little to no
“down time,” and helped Martin Flyer, Inc. streamline its accounting and other aspects of its
38. Despite its contribution to Martin Flyer, Inc.’s success, Argentto never abused its
position and never demanded unreasonable fees for either the software improvement it created
specifically for Martin Flyer, Inc. or for the maintenance and other IT services it performed.
39. In kind, Gary and Alan Flyer steadfastly respected Argentto’s intellectual
property, and, in accordance with law and their contractual agreements, never attempted to
40. Martin Flyer, Inc. remains a licensee of Argentto’s ASI Financials Software, and
41. While the precise details of the deal are not known to Plaintiffs, on information
and belief Gary and Alan Flyer and Martin Flyer, Inc. entered into a deal with a KGK Group
entity that resulted in the sale of the Martin Flyer business to the KGK Group entity, and included
the creation of Martin Flyer Jewelry LLC to operate under the Martin Flyer brand.
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42. On information and belief, Martin Flyer, Inc. is still an active New York
corporation, and remains in the control of Gary and Alan Flyer, but it no longer operates its prior
43. Rather, on information and belief, Martin Flyer Jewelry LLC now operates under
the Martin Flyer brand, occupies Martin Flyer, Inc.’s former offices, employs much of the same
staff, and is now run by Joshua Kaufman, who is related to Gary and Alan Flyer by marriage.
44. On information and belief, Martin Flyer Jewelry LLC is owned, in whole or in
part, by a KGK entity, including but not limited to KGK Jewelry (NY) and/or KGK Jewelry
(China).
45. Upon taking the helm of Martin Flyer LLC in mid-2009, Joshua Korman
immediately set upon a course to squander the enormous goodwill associated with the Martin
Flyer brand, which Gary and Alan Flyer had built up over the decades through sound and honest
business practices.
46. This course includes, but is far from limited to, Joshua Kaufman knowing and
willful decision to flout the intellectual property protections afforded, by law and by explicit
47. Because Martin Flyer, Inc. had such great success with the ASI Financials
Software, Martin Flyer LLC approached Argentto in or about June/July 2009 about using the ASI
48. Contrary to what Argentto reasonably believed, Joshua Kaufman and Martin Flyer
LLC never intended to make such a good faith assessment, but instead intended to and ultimately
did use that trial period to loot Argentto’s intellectual property either by direct theft or improper
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and unlawful “reverse engineering,” including the use of trickery and deceit in an attempt to gain
49. In the reasonable belief that Joshua Kaufman and Martin Flyer LLC intended to
make a good faith assessment of the ASI Financials Software and Argentto’s other IT services,
and whether and to what extent it could continue to facilitate its business processes and
DEFENDANTS’ MISAPPROPRIATION OF
PLAINTIFFS’ INTELLECTUAL PROPERTY
50. Under the terms of the parties’ contractual agreements, and under the generally
applicable federal copyright and computer fraud and abuse statutes, Martin Flyer LLC was not
permitted to access the ASI Financials Software code, was not permitted to acquire Argentto’s
passwords to access that code, and were not permitted to attempt to reverse engineer the ASI
51. Nevertheless, within weeks of having access to the ASI Financials Software for
use in its business, Joshua Kaufman and Martin Flyer LLC began violating all of the above, and
even began to invite other entities to either assist them in misappropriating the ASI Financials
52. The Martin Flyer Defendants allowed the AGQA Defendants and the KGK
Defendants to investigate the ASI Financials Software and misappropriate, through whatever
53. Both the AGQA Defendants and the KGK Defendants accepted this invitation,
and assigned their own IT personnel with the task of misappropriating the ASI Financials
Software.
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access all or certain elements of the ASI Financials Software, and Ted Krapf did so.
55. Similarly, employees of KGK Jewelry (NY) and/or KGK Jewelry (China) –
namely Alan Bloom, Prasad Sahoo, and Pradeep Bubna, were directed to misappropriate or
improperly access all or certain elements of the ASI Financials Software, and did so.
56. At several points during the 90-day period – which Argentto viewed a good faith
trial period and which the Defendants viewed as something of a looting spree – Defendants,
acting alone and in concert, accessed, moved, altered, or otherwise destroyed protected database
57. In addition, at one or more points during the 90-day period, one or more of the
Defendants, acting alone or in concert, intentionally hacked around Argentto’s password and
exclusive administrator access to the protected ASI Financials Software, which were set up by
Argentto for the very purpose of preventing unauthorized access to its proprietary and
58. Joshua Kaufman has admitted and acknowledged – in writing – that the ASI
Financials Software database was compromised in connection with Martin Flyer LLC’s use of it
during the 90-day period, and, in that same writing, clearly expressed his understanding that all
aspects of the ASI Financials Software is legally protected and was not to be tampered with or
59. During the course of conduct described above, Plaintiffs continued to provide IT
services to Martin Flyer LLC, including fixing problems created by Defendants’ unauthorized
tampering with Plaintiffs’ intellectual property; training new Martin Flyer LLC employees, many
of whom came from one of the KGK Group entities, and appear to have played a dual role as
employees and/or agents of both Martin Flyer LLC and one or more of the KGK Defendants; and
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generally advising Martin Flyer LLC regarding how to make the most use of the ASI Financials
60. Despite never having any intention of ultimately purchasing a license to use the
ASI Financials Software, Martin Flyer LLC continued to accept these benefits, which came at
great cost to Argentto and which greatly benefitted Martin Flyer LLC.
61. Because Martin Flyer LLC was never operating in good faith, it has unjustly
received benefits from Plaintiffs for which Plaintiffs are entitled to reasonable compensation.
62. In or around October 2009, the Martin Flyer Defendants terminated their
relationship with Argentto, thereby ending any and all right to use or access the ASI Financials
Software.
63. None of the Defendants currently hold any license to use or access the ASI
64. Despite their lack of any color of authority to use any Argentto software or other
intellectual property, the Martin Flyer Defendants continue to openly use the ASI Financials
65. Shockingly, but perhaps not surprisingly, the Martin Flyer Defendants unlawfully
found, accessed, and are currently using a version of the ASI Financials Software that they
improperly resurrected and/or reverse engineered by using an old backup copy of the ASI
Financials Software database, in blatant violation of Plaintiffs’ copyrights and other statutory and
66. Based on the foregoing, Plaintiffs are entitled to injunctive relief to stop this
egregious violation of the law and Plaintiffs’ rights, disgorgement of all the profits the
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Defendants have made as a result of their unlawful conduct, as well as millions of dollars in
67. Moreover, each of the Defendants is jointly and severally liable to Plaintiffs for
the full amount of such disgorged profits and damages, and judgment should be entered against
68. Plaintiffs repeat and reallege each and every allegation set forth above as though
Defendants have infringed and will continue to infringe Plaintiffs’ federally registered copyright
in the ASI Financials Software by accessing, manipulating, altering, and using the ASI Financials
70. Defendants’ infringing conduct has caused and, unless restrained by this Court,
will continue to cause Plaintiffs irreparable injury, for which Plaintiffs have no adequate remedy
at law.
agents, and employees, and all other persons acting in concert with them, from engaging in
72. Plaintiffs are further entitled to recover from Defendants the damages Plaintiffs
have sustained and will sustain as a direct result of Defendants’ wrongful acts. The amount of
73. Plaintiffs are further entitled to recover from Defendants the gains, profits, and
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advantages Defendants have gained as a result of their wrongful acts. Plaintiffs are at present
unable to ascertain the full extent of the gains, profits, and advantages Defendants have obtained
75. Defendants are willfully engaged in, and are willfully engaging in, the acts
complained of with oppression, fraud, and malice, and in conscious disregard of the rights of
Plaintiffs. Defendants’ infringing actions are willful and deliberate, and Plaintiffs are entitled to
statutory damages, as well as attorney fees and costs pursuant to 17 U.S.C. § 504 and 17 U.S.C. §
505.
76. Plaintiffs repeat and reallege each and every allegation set forth above as though
seq., Defendants have knowingly accessed a computer without authorization or exceeded their
78. Plaintiffs have suffered, and will continue to suffer unless Defendants’ unlawful
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THIRD CAUSE OF ACTION
81. Plaintiffs repeat and reallege each and every allegation set forth above as though
seq., Defendants have circumvented a technological measure that effectively controls access to a
work protected by federal copyright statutes, and have manufactured, imported, provided, or
otherwise trafficked in a technology, product, service device, component, or part thereof that was
measure that effectively protects Plaintiffs’ copyrights under the federal copyright statutes.
agents, and employees, and all other persons acting in concert with them, from engaging in
84. Plaintiffs are further entitled to recover from Defendants the damages Plaintiffs
have sustained and will sustain as a direct result of Defendants’ wrongful acts. The amount of
85. Plaintiffs are further entitled to recover from Defendants the gains, profits, and
advantages Defendants have gained as a result of their wrongful acts. Plaintiffs are at present
unable to ascertain the full extent of the gains, profits, and advantages Defendants have obtained
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FOURTH CAUSE OF ACTION
87. Plaintiffs repeat and reallege each and every allegation set forth above as though
88. The information reflected in the ASI Financials Software and code, and the
accompanying unique and proprietary techniques for structuring data and database objects,
constitute Plaintiffs’ confidential and proprietary information and trade secrets (the “Trade
Secrets”).
89. The Trade Secrets give Plaintiffs a significant competitive advantage over its
existing and would-be competitors, which advantage would be lost if the Trade Secrets became
90. Plaintiffs have made reasonable efforts under the circumstances to maintain the
91. Plaintiffs’ Trade Secrets derive independent economic value from not being
generally known to the public or to other persons who can obtain economic benefit from their
disclosure.
copy of Plaintiffs’ code, (b) illicitly using Plaintiffs’ Trade Secrets without authorization, and (c)
illicitly disclosing Plaintiffs’ Trade Secrets to third parties without authorization. Defendants
have utilized and disclosed Plaintiffs’ Trade Secrets for the benefit of themselves without
Plaintiffs’ consent and without regard to Plaintiffs’ rights, and without compensation, permission,
or license.
93. Defendants’ conduct was, is, and remains willful and wanton, and was undertaken
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94. By reason of the foregoing, Defendants have been unjustly enriched and Plaintiffs
have suffered irreparable harm as a result of the misappropriations of their Trade Secrets, and
will continue to suffer irreparable harm, which cannot be adequately redressed at law, unless
Defendants, their agents, and all those acting in concert with them are enjoined from engaging in
95. Plaintiffs are further entitled to recover from Defendants the damages Plaintiffs
have sustained and will sustain as a direct result of Defendants’ wrongful acts. The amount of
96. Plaintiffs are further entitled to recover from Defendants the gains, profits, and
advantages Defendants have gained as a result of their wrongful acts. Plaintiffs are at present
unable to ascertain the full extent of the gains, profits, and advantages Defendants have obtained
98. Plaintiffs also reserve the right to see punitive and exemplary damages, and
BREACH OF CONTRACT
99. Plaintiff repeats and realleges each and every allegation set forth above as though
100. Defendants were bound by the Terms and Conditions of their agreement with
101. In accordance with these contracts, Defendants were only entitled to utilize the
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102. In accordance with these contracts, Defendants were bound to hold all of
103. In accordance with these contracts, all rights in and to the works created were the
property of Plaintiffs.
knowledge or consent have continued to use, disclose and/or share with third parties Plaintiffs’
Trade Secrets.
106. The aforesaid acts of Defendants have caused and shall cause Argentto damages in
an amount not yet fully determined, but believed to be in excess of five million dollars
($5,000,000.00).
UNJUST ENRICHMENT
107. Plaintiffs repeat and reallege each and every allegation set forth above as though
108. Defendants’ adoption, reproduction, and/or use of Plaintiffs’ Trade Secrets and
confidential and proprietary business information including, among other things, Plaintiffs’ ASI
Financials Software and other intellectual property, has unjust enriched Defendants by giving
them the benefit of Argentto’s highly sophisticated and valuable intellectual property, and
depriving Plaintiffs of profits from the sale or licensing of their ASI Financials Software.
109. Plaintiffs have suffered irreparable harm and damages as a result of Defendants’
acts and are suffering money damages in an amount not yet fully determined, but believed to be
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SEVENTH CAUSE OF ACTION
CONVERSION
110. Plaintiffs repeat and reallege each and every allegation contained above as though
111. The Trade Secrets and confidential and proprietary business information
including, among other things, Plaintiffs’ ASI Financials Software, constitute Plaintiffs’ valuable
property.
112. Upon information and belief, Defendants have taken Plaintiffs’ property and used
it for their own benefit, by means that include, but are not limited to, using or recreating a copy of
Plaintiffs’ ASI Financials Software and utilizing the intellectual property contained therein
without authorization.
property, and are liable to Plaintiffs in an amount to be determined at trial, but believed to be in
UNFAIR COMPETITION
114. Plaintiffs repeat and reallege each and every allegation contained above as though
115. The acts described above constitute unfair competition under New York law. The
acts include, but are not limited to (a) misappropriation of trade secrets; (b) conversion; and (c)
116. Defendants’ acts were and are intentional and carried out for the purpose of
117. Plaintiffs have been damaged by Defendants’ actions and are also suffering
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irreparable harm for which they has no adequate remedy at law.
118. As a direct, proximate and foreseeable result of such unlawful conduct, plaintiffs
have suffered money damages in an amount to be determined at trial, but believed to be in excess
JURY DEMAND
WHEREFORE, Plaintiffs respectfully request that judgment be entered in their favor and
a. Defendants, and all those acting in concert and participation with them, are
and/or modifying Plaintiffs’ confidential and proprietary information and/or trade secrets,
including but not limited to Plaintiffs’ source and object codes and other computer codes,
computer programs and software, algorithms, strategic plans, customer information and
any and all documents, computer files, computer diskettes, or information that Defendants
may have derived from Plaintiffs’ confidential and proprietary information and/or trade
secrets, including without limitation, the software currently or formerly identified as ASI
b. Defendants are ordered to preserve and retain, and are enjoined from
destroying, deleting, transferring or modifying in any way, all documents, tangible items
control or the custody or control of their lawyers, agents, family members, friends, or any
other person representing them or acting on their behalf: (i) that relate to Plaintiffs or any
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affiliated entities; or (ii) that otherwise relate to the subject matter of this dispute.
with them, from, directly or indirectly, utilizing, divulging, copying, cloning, recreating
and/or modifying Plaintiffs’ confidential and proprietary information and/or trade secrets,
including but not limited to, Plaintiffs’ source or object codes and other computer codes,
computer programs and software, algorithms, strategic plans, customer information and
any and all documents, computer files, computer diskettes, or information that Defendants
may have derived from Plaintiffs’ confidential and proprietary information and/or trade
secrets; including without limitation, the program currently or formerly identified as ASI
Financials Software;
and all copies – whether on paper, in computer memory, file, disk or stored on any other
control of their lawyers, agents, family members, friends or any other persons
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